Video and Hansard – Commons Debate on Pensions Uprating (UK Pensioners Living Overseas) – 11 May 2016

May 12, 2016 Frozen Pensions 12 Comments

OFFICIAL HANSARD REPORT: Pensions Uprating (UK Pensioners Living Overseas)

11 May 2016 
2.10 pm

Ian Blackford (Ross, Skye and Lochaber) (SNP)

I beg to move,

That this House notes with concern that the pensions of 550,000 UK pensioners residing in a number of overseas countries will no longer be uprated; is further concerned that this unfairness will lead to hardship for overseas pensioners and that this measure will discourage many UK citizens living in the UK from returning to their country of origin as many wish to do in their retirement; regrets that the Government has taken this action which will lead to loneliness and anger among UK pensioners living abroad; and calls on the Government to withdraw this measure and pay UK pensioners at home and abroad their due state pension with the same uprating adjustment in the interests of fairness and equity.

I am grateful to the Backbench Business Committee for granting this debate.

I tabled early-day motion 1235 praying that the uprating regulations, which deny 550,000 of our pensioners their full pension entitlement, be annulled. That motion had the support of 97 Members from eight parties, including the Government party, as well as independent Members. This matter has cross-party support, and I hope that today the Government will reflect on the injustice that many face and the strength of that cross-party support.

The policy of not awarding increases has been followed by successive Governments and continues with the introduction of the new state pension that was introduced this April. People’s rights to their full UK pension are determined by the country they live in. There are 640,000 UK pensioners living in overseas countries where the UK meets its full obligation, but sadly there are 550,000 pensioners living in countries where annual uprating does not take place and pensions are frozen.

Sir Peter Bottomley (Worthing West) (Con)

For the benefit of those who pick up the beginning of this debate and do not necessarily stay for the details at the end, does the hon. Gentleman agree that nobody intended this injustice to start? It started because in the 1950s there was no provision for uprating. Other countries introduced uprating, and no one bothered to say, “This is crazy”?

Ian Blackford

I thank the hon. Gentleman for that intervention. I agree that an anomaly exists. There is no logic whereby pensioners living in the US, for example, can benefit from their pension, but those in Canada cannot. It is a question of justice. That is why I am asking all Members across the House to unite on a matter that should concern us all. It is about doing the right thing, and I hope that today the Minister and the Government will respond correctly.

The pensions legislation provided for the additional state pension to be uprated at least in line with earnings. It also provided for the current policy on state pension uprating overseas to continue. Thus pensioners who would have been entitled to upratings if they retired in the UK are no longer entitled to that increased payment simply because they live in certain overseas countries. Pensions will be uprated only in a European Union country or one with which the UK has a reciprocal agreement. There are 16 such non-European Union countries, including the USA, Israel, Turkey and the republics of the former Yugoslavia. The agreements with Canada and New Zealand and the former agreement with Australia do not provide for uprating. Between them those three countries account for around 80% of overseas residents who do not get their full pension entitlement.

We are talking about individuals who have paid national insurance in anticipation of receiving a full UK state pension. We often talk about a postcode lottery; in this case it is a national lottery, with 550,000 pensioners paying the price—entitlement to a full pension based not on their national insurance contributions, but on the country they live in. How can that be fair? If they live in the US Virgin Islands, their pension rights are protected, but if they live in the British Virgin Islands, those rights are not protected. The debate today is about fairness. It should not be about where pensioners live.

Pensions, after all, are a contract. They are not a benefit. It is only fair and just that a British pensioner who chooses to enjoy their retirement overseas should receive the same amount as a British pensioner who chooses to remain in the United Kingdom. Either they have an entitlement or they do not.

Mr Charles Walker (Broxbourne) (Con)

If people pay in, the pension should pay out, regardless of their address.

Ian Blackford

I thank the hon. Gentleman for that very succinct comment. That is exactly the point. This should be about what are often called British values of fairness. If people have paid into a pension, they should get their entitlement with the annual uprating. There is no excuse for us not to do that. Why do we seem to have different classes of pensioners? It is morally unjust and truly unfair for the Government to strip pensioners of their right to equal state provision. Overseas pensioners are entitled to fairness. The state pension is a right, not a privilege.

I look forward to the Minister responding later in the debate, but I hope that we do not hear what we have heard before—that it is all about cost. It is about doing the right thing and recognising that all pensioners deserve to be treated fairly. We should focus today on the 550,000 pensioners who are losing out, but there is a topical dimension to this debate as well. What are the implications for the 400,000 UK pensioners living in EU countries if there is a Brexit vote in a few weeks’ time? In the other place, Baroness Altmann, responding on 3 March to a parliamentary question of 23 February, stated:

“Of course there is uncertainty about how a vote to leave the EU could impact on access to pensioner benefits for UK pensioners living in other parts of Europe.”

What are we to make of that? There is no clarity at all in that answer from the Government. Are the 550,000 pensioners with frozen pensions likely to be joined by others if there is a Brexit vote?

The Government could say today that irrespective of that vote, those living in EU countries will have their pensions protected. Will the Minister do that today? Will he assure our pensioners living in EU countries that their pension will not be affected by a Brexit vote? That is a simple request. It is easy for the Minister to respond appropriately and remove the uncertainty for UK pensioners living in Europe.

The Government want to lift the limit on the period that UK citizens living abroad can vote from 15 years to their entire lifetime. Why would the Government want to confer voting rights on UK pensioners, but deny them full pension rights? What drives the decision-making process of this Government? Is it cost savings, or will they accept our obligations to meet our commitment to paying pensions, regardless of country of residence? I appreciate that the Minister will no doubt have been told by the Treasury to offer nothing. The Minister is a loyal Government servant and I understand his position, but let me help him to strengthen his case with the Treasury.

The present Chancellor of the Exchequer, during a debate on the Pensions Bill in the 2003-2004 Session, when shadow Chief Secretary to the Treasury, said:

“If the system worked in the way that most people think, it would not matter where a person lived”––[Official Report, Pensions Public Bill Committee, 18 March 2004; c. 256.]

I have not said this before, but on this occasion I agree with the Chancellor: it should not matter where a person lives.

I appeal to the Minister to reflect on those words from his colleague, the present Chancellor. He spoke those words while in opposition, but each and every one of us should be judged by our deeds in government. It is not good enough to say the right thing when in opposition, and then, when in government, claim that it is all about cost. Let us today do the right thing. Let us unite in the House, standing up for all our pensioners, regardless of domicile.

I look forward to hearing voices from all sides of the Chamber. I look forward to hearing the hon. Member for Ashton-under-Lyne (Angela Rayner) speaking from the Labour Front Bench. She said at a meeting of the all-party parliamentary group on frozen pensions on 2 February this year, “The situation is unfair, illogical and doesn’t make sense.” I agree with those sentiments. If the House divides on the motion, I hope Members on both sides of the Chamber will stand shoulder to shoulder with all the pensioners who are seeking their full pension rights.

Patrick Grady (Glasgow North) (SNP)

My hon. Friend mentioned the all-party group on frozen British pensions. He and the Chamber might be interested to know that he has just been elected as a vice-chair of the all-party group on women against state pension inequality and that my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) has been elected as co-chair—the meeting at which that happened was absolutely crowded. Does my hon. Friend share my concern that these injustices on pensions issues seem to run like a thread throughout UK Government policy? It really is time to resolve the WASPI issue and the overseas pensioners issue.

Ian Blackford

I thank my hon. Friend for that news—I did not even know that I was up for election. He is absolutely right: we are talking today about frozen pensions, but women born in the 1950s also face injustices. Many of us on both sides of the Chamber have engaged in the debate about that, and the fight goes on. Given the importance of these issues, I have suggested to the Minister that we should take some of them out of the Chamber and have a pensions commission that can look holistically at them. We can then make sure that we get them right and accept the obligations we all have to look after our pensioners, whether that is the women born in the 1950s or the frozen pensioners who are suffering.

I acknowledge that there is a cost to the Government in unfreezing pensions, but the resulting increased migration would offer them savings to help pay for doing that. In 2010, an Oxford Economics study using Government statistics showed that a pensioner who permanently leaves the UK saves the UK £7,700 a year in NHS usage and other age-related benefits, while the lost income in relation to such a pensioner would amount to £3,900—a net saving to the Exchequer of £3,800 at 2010 prices or £4,300 at today’s prices.

Many people living in the UK today perhaps came from the Caribbean or the Indian subcontinent and worked here all their lives, but those who want to go back to their country of origin cannot do so, because they risk being penalised by a frozen pension. We must help those who want to do that, as well as UK pensioners who live overseas. This is, therefore, not just about the gross cost of increased pension spending; there is an element of potentially reduced commitments to pensioners who seek to leave the UK to be with loved ones abroad or to return to their country of origin.

Those subject to frozen pensions have waited long enough to see this matter debated in the House. We must not let them down. We need to speak up for those pensioners living in the UK who want to move abroad to be with loved ones who have emigrated and those who came to work here and who wish to return to their country of origin, but who are fearful of the impact. There is a host of reasons why a pensioner may choose to move abroad in later life; it is simply wrong to punish them for making such a choice.

Pensioners who have paid the required national insurance contributions during their working lives, in the expectation of a decent basic pension in retirement, will find themselves living on incomes that fall in real terms year on year. Paying national insurance contributions to qualify for a state pension is mandatory. All recipients of the British state pension have made these contributions, and it is clearly unfair to differentiate payment levels.

Pensioners will now face ending their days in poverty because they chose to live in the “wrong” country—in most cases with no knowledge of the implications of their choice for their pension. Some people are being forced back to the UK—away from the family they love—just to secure an income they can survive on.

Reform would bring the UK in line with international norms, as most other developed countries now pay their state pension equivalents in the way I propose. We are, I am sad to say, the only country in the OECD that does not pay pensions irrespective of domicile. That should shame us all. Why are we the only country that does not accept our moral responsibility to our pensioners? That must change.

We know the statistics—that 550,000 people are affected—but behind those numbers are 550,000 human stories. Let me take three examples of the human cost of freezing state pensions. Abhik Bonnerjee, now 73, moved from India to Glasgow in 1960. He worked in the UK for 38 years—in shipbuilding, steel manufacture and the food industry. He also owned a restaurant for six years.

Abhik returned to India in 1997 and reached the state pension age in 2008, when it was paid at £87.30 a week. He made all the required national insurance contributions, and if he was still in the UK today, he would be getting not £87 but the full UK state pension. The decline in his real-terms income has left Abhik concerned about losing his home. He now feels he may have to move back to the UK. Why are we putting such a gentleman in such a position?

Alan Brown (Kilmarnock and Loudoun) (SNP)

My hon. Friend gives a very good personal example. Is there not also a paradox? Abhik faces the dilemma of returning to the UK, but if he does return, not only will his pension be uprated to the full amount, but he will be able to access health and social care, so, as well as the disruption to this person’s life, there would also be a further cost to the UK Government.

Ian Blackford

My hon. Friend is absolutely correct. This is not just about someone who comes back to the UK to live. Oddly enough, if such individuals came back to the UK for a holiday, they would collect their full UK state pension when they were here. The whole thing is just daft; we need to normalise it and accept our full responsibilities.

Let me give the example of Rita Young. She is 78 and lives in Peterborough, in the UK. She retired in 2002, aged 67, having enjoyed a long career in market research and as a community volunteer. Rita’s son moved to work in Australia some time ago and now has a family there. Since being widowed, Rita has wanted to join her son and grandchildren, but she has felt unable to do so because of the prospect of a frozen pension.

As Rita gets older, she finds daily life increasingly difficult, especially as she does not have a family around her to rely on. She is deeply saddened that she is not able to be with her family during the later stages of her life. She said:

“I have worked and contributed to my state pension all my life. It doesn’t seem fair that the government can just stop uprating it because I want to be with my family.”

That is the human cost of frozen pensions.

Lastly, there is former college lecturer Anne Puckridge, now 91. She lived and worked in the UK all her working life, paying mandatory national insurance contributions throughout. In 2002, aged 77, she finally retired and decided to move to Canada to be with her daughter and grandchildren, who had moved to Calgary. Fourteen years on, Anne, who served as an intelligence officer in the Women’s Royal Naval Service in the second world war, is struggling to live on a frozen pension of £75.50 a week.

Martin Docherty-Hughes (West Dunbartonshire) (SNP)

Does my hon. Friend agree that the fact that the majority of Commonwealth nations are part of this process where pensions are frozen is a slap in the face for those who served not only this country but the Commonwealth in the second world war and in conflicts after that? In this year, when we have so many commemorations, unfreezing pensions would be a worthwhile exercise and would show that we value the worth of these people.

Ian Blackford

Absolutely. We owe a debt of gratitude to these people, and we should recognise that. My hon. Friend talks about the Commonwealth, and the arrangements are not reciprocal, because a Canadian pensioner who moved here would get their full pension. We need to make sure that our pensioners living in Canada are treated in the same way.

Anne feels that she will be forced to move back to the United Kingdom because her pension will no longer cover her day-to-day expenses, and she is increasingly reliant on her daughter to get by. She said:

“It’s the small things, and the injustice, that is really getting to me. I value my independence, but I can’t go on living on the breadline and I don’t want to inflict this on my family. As well as ever-increasing poverty, I feel a sense of stress and shame, which is affecting my health.”

For Abhik, Rita, Anne and all those who are not getting what is rightfully theirs, let this House today send a clear and unequivocal message to the Government that we want all our pensioners, regardless of domicile, to receive what is rightfully theirs: a full state pension. Today we can take the first steps towards fixing this injustice and delivering fairness for all our pensioners.

2.29 pm

The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)

I congratulate the hon. Member for Ross, Skye and Lochaber (Ian Blackford), and all those on the Order Paper who support the motion, on securing the debate on this very important subject. For the sake of clarity, I would like to point out a flaw in the motion. It seems to indicate that it is this Government who have introduced the measure, when it states

“will no longer be uprated”


“regrets that the Government has taken this action”.

I would simply point out to the hon. Gentleman that this policy has been consistent for 70 years. It is not something that this Government have done.

Ian Blackford

I made it clear in my speech that I recognise that this has been happening since the 1940s. I absolutely acknowledge that. This has happened under all Governments. None the less, we have the opportunity today to respond to it in the correct manner.

Sir Peter Bottomley


Mr Vara

I give way to my hon. Friend.

Sir Peter Bottomley

The House and the Minister will recall that each year a statutory instrument, or equivalent legislation, is brought before the House to continue the policy, so none of us can say we are blameless. The fact that a small minority of us have so far been voting against what the Government propose to Parliament is our fault for not recruiting more people. The best people to recruit would be the Chancellor and the Prime Minister, and then the Ministers at the Department for Work and Pensions who have to face up for the Government and will be able to pass the responsibility on to those who carry the responsibility—the most senior Ministers in Government.

Mr Vara

I am grateful to both hon. Members for clarifying that point. I was simply pointing out an inconsistency on the Order Paper. For the sake of good order, I wanted to make clear that although yearly decisions have been taken by the Government, they are consistent with the policy undertaken by successive Governments from both sides of the House.

The UK state pension is exportable worldwide, regardless of recipients’ countries of residence or nationality. Successive Governments have taken the view that all those who have worked in the UK and built up an entitlement to state pension should be able to receive it. We have no plans to change this arrangement. However, the state pension is only increased, or uprated, each year where the recipient is resident in the European Economic Area or a country with which the UK has a reciprocal agreement that allows for uprating.

The policy on this issue has been consistent for 70 years, including under the Governments of Attlee, Wilson, Blair, Macmillan, Thatcher and Major. To uprate all state pension payments, regardless of a recipient’s country of residence, to the rate currently paid in the UK would cost in excess of an extra half a billion pounds a year. This amount would increase significantly over time. If arrears were to be included, the cost would be in the billions of pounds. Some have suggested partial uprating, but while this may cost tens of millions of pounds in the short term, the annual cost of the policy would converge to that of full uprating in the long term.

Sir Peter Bottomley

It might help if the Minister, either today or in the next Session, could tell us the last time the Government voluntarily negotiated a reciprocal agreement with another nation or territory. Secondly, since the last negotiation on a voluntary reciprocal agreement, how many other countries have been brought into the uprating for other reasons, such as accession to the EU?

Mr Vara

I can certainly partly address my hon. Friend’s question. No new commitments allowing for uprating have been made since the 1980s. As far as the other information he seeks, I am more than happy to write to him.

We have to recognise that resources are limited. The Government have to make judgements and take difficult decisions about how best to use limited resources. The majority of pensioners abroad live in countries such as Australia, Canada, New Zealand and South Africa. The rules in those countries vary. Some have largely means-tested pension systems, whereby a significant proportion of any increase in the amount of the UK state pension would go to the Treasuries of those countries, rather than the pensioner. I should add that many people who voluntarily move abroad do so before they have reached pensionable age. As such, many of them may well have been able to build up some pension provision in the countries they have emigrated to.

We should remember that the decision to move abroad is a voluntary one. It remains a personal choice dependent on the circumstances of the individual, which will differ from person to person. The implications for their state pension is just one factor in that decision. There is no evidence of a proven behavioural link between the uprating policy for the state pension and pensioner migration.

Ian Blackford

I am grateful to the Minister for giving way. He is being very generous with his time. Will he not accept that every other OECD country allows their pensioners who live abroad to collect their pension? Why are we standing against this? We are not talking about people getting something they are not entitled to, whether they have moved abroad before they have retired. We are talking about them getting something they are entitled to because they have made national insurance contributions. That is what we are denying them.

Mr Vara

It is important that we do not just look at this from one narrow perspective. The hon. Gentleman says that people have paid national insurance and are therefore entitled to this. As I say, there are other aspects involved. For example, there is the element of individual choice. When people think about going abroad, it is not purely this issue that will determine whether they will live here or abroad.

Over the years, the UK has entered into a number of reciprocal agreements with other countries. Although most provide for payment of upratings, that is not the primary purpose of reciprocal social security agreements. They are intended mainly to provide a measure of co-ordination between social security schemes to protect the social security of workers moving between the two countries during their working lives. They prevent employees, their employers and the self-employed from needing to pay social security contributions to both the home state and the state of employment at the same time to get access to social security benefits. Of course, social security agreements vary to some extent from country to country, depending on the nature and scope of the other country’s social security scheme. It should also be noted that the UK is not alone in applying restrictions on payment of state pensions abroad. In some respects, the UK arrangements are less restrictive than those that apply in other countries.

The crux of the issue is individual choice. Those who have contributed to the UK state pension scheme are free to draw their entitlement from wherever they choose to live. The rules governing the uprating of pensions are straightforward and widely publicised. If a person chooses to live in country A their pension will be uprated, but if the choice is to live in country B their pension will not be uprated. In the final analysis, it is for the individual to weigh the benefits of living in country B, where her or his pension will not be uprated, against the benefits afforded by country A—or, indeed, remaining in the UK.

I am mindful that there are a number of hon. Members in the Chamber who wish to speak in the debate. It is a Backbench Business debate and I am mindful to give Back Benchers the freedom and opportunity to speak for a longer time than those on the Front Benches. So I congratulate again the hon. Member for Ross, Skye and Lochaber, and those who have supported him, on securing the debate. I am very pleased to have been able to set out the Government’s position, which remains unchanged.

2.38 pm

Angela Rayner (Ashton-under-Lyne) (Lab)

I congratulate the hon. Members for Ross, Skye and Lochaber (Ian Blackford) and for Motherwell and Wishaw (Marion Fellows), and my hon. Friend the Member for Vauxhall (Kate Hoey) on securing the debate. I thank all hon. Members taking part in it. They have already made some significant contributions.

My party leader has spoken eloquently on this issue in the past, having previously served on the all-party group. Frozen pensions seem even more of a problem today in the context of the rich and wealthy hiding their money in overseas tax havens. Many of my constituents have grandparents and parents who answered our Governments’ calls after the war to come to rebuild our country. Many of those pensioners have been long-standing public servants and have even fought for our country. They have paid national insurance for many, if not all, of their working lives and played by the rules.

Since 1981, however, it has been the position that where a person is not “ordinarily resident” in the UK there is no entitlement to an annual increase in retirement pension. The Government recently reaffirmed this in the debate on 26 January where the Minister stated:

“As hon. Members will be aware, the state pension is payable worldwide, but upratings for people who are not ordinarily resident in Great Britain are generally restricted to people living in the European economic area, Switzerland, Gibraltar or countries with which there is a reciprocal agreement that provides for uprating.”—[Official Report, Second Delegated Legislation Committee, 26 January 2016; c. 4.]

Cost has been cited as a determining factor in continuing to freeze pensions, and the House of Commons Library puts that in the region of £500 million a year. However, the proposal of partial uprating has an estimated up-front cost of just £37 million—small in Government spending terms—and this option offers an affordable and expeditious policy alternative. I and my party are keen to review the research by the International Consortium of British Pensioners and the National Pensioners Convention that suggests a partial way forward that is cost neutral to the Exchequer. We want to be bold in our response, and also credible. Indeed, I am aware that the right hon. Member for West Dorset (Mr Letwin) has made a commitment to look into this proposal on behalf of the Government.

As somebody relatively new to this brief, I believe it is worth taking a fresh look at the current arrangements, as the logic is just not there. Arrangements have been made with some countries and not others. While one British pensioner in the USA gets an uprated pension, a pensioner in neighbouring Canada has theirs frozen. The Government should review the impact of this policy. Labour is calling for a full equalities and impact assessment of the freeze in overseas state pensions, as well as a country-by-country analysis of the number of people affected. I recently met the ICBP and the NPC, and we discussed the impact of the freeze in overseas state pensions. Many Members have spoken passionately about the individual impacts, such as in the case of Rita Young being kept away from her family, mentioned by the hon. Member for Ross, Skye and Lochaber.

The Government have told us half the story, but Ministers must be forthcoming about the impact of this policy. For example, the vast majority of those affected live in Canada or Australia, two countries where the pensions system is means-tested. The previous Pensions Minister said that, as a result, uprating the pensions of British citizens living in those countries would, in effect, mean a transfer to the Canadian and Australian exchequers, and the pensioners themselves would not necessarily be any better off. I would welcome further details from the Government about the number of British pensioners living in countries where the pensions system are not means-tested. I would be grateful if the Minister could give the House that information today or write to me. How many British pensioners live in countries where the pensions system is not means-tested, and by how much are they losing out? Echoing the request made earlier, have the countries in which they live approached the UK Government for a reciprocal agreement similar to that which we have with the United States, and if so, on what grounds were those agreements refused? Overall, will the Minister give us an estimate of the cost to the Exchequer of uprating for British pensioners living in countries where the pensions system is not means-tested?

I am keen to listen, learn and work with stakeholders such as the all-party parliamentary group to find a solution that is credible, affordable and fair. Members across the House will, like me, have received emails and correspondence from many overseas pensioners who will be watching this debate. I hope they take from it the message that Members from across this House value the contribution that they have made to our great country and will continue to work across parties to seek a fair way forward.

2.44 pm

Sir Roger Gale (North Thanet) (Con)

I, too, congratulate the hon. Member for Ross, Skye and Lochaber (Ian Blackford) on his good fortune in securing this debate. I also congratulate him on his election to officership of the all-party WASPI group. Perhaps in that capacity he will be good enough to write to my constituents who expect me to be at its meeting today to explain why both he and I are here rather than upstairs.

Speaking as chairman of the all-party parliamentary group on frozen British pensions, hon. Members on both sides of the House might be surprised that my name is not on the motion. The reason is merely that it is technically flawed, as my hon. Friend the Minister and, I think, the hon. Gentleman recognised. However, that should not be allowed to diminish in any way its thrust, which is very simple. For that reason, I do not want to detain the House for very long.

This is about an injustice that was perpetrated just post-war and has continued ever since under successive Governments. The point has been made, but let us make it again: it is absurd that a pensioner living in Canada on one side of the Niagara falls has a frozen pension, while a pensioner living in the United States, 500 yards or so away on the other side of the river, does not have a frozen pension. There is no equity, no sense and no logic in that whatsoever.

It has been said, slightly incorrectly, that a lot of these people have paid national insurance contributions and should therefore be getting their pensions. We all need to recognise that national insurance is not a funded pension scheme. Unlike a private pension scheme, which is fully funded, NI is not—it contributes to a number of benefits. Nevertheless, throughout their working lives, very many of these now-elderly people who are being shoddily treated have not only paid national insurance contributions but paid their taxes to the United Kingdom, served the United Kingdom, and, in some cases, served the United Kingdom in the armed forces. If, in retirement, having paid their dues all their working lives, they wish then to join friends or family in another country, why should they not be able to do so and take their pensions with them?

As we have heard, there is another restriction on movement. A significant number of Commonwealth immigrants who came to the United Kingdom in the 1950s and 1960s, became established here, worked here, regard themselves as British and have paid their dues all their working lives, would like now, in old age, to return to the Caribbean, for example, but feel that they are being prevented from doing so because they are afraid that their pensions will be frozen and they will not be able to afford to live in the country of their birth. I believe that is morally wrong.

Another downside to all this is that we are in danger of generating a cadre of pensioners who will be coming back to the United Kingdom, like the 90-year-old in Canada who may have to abandon his partner who has dementia and come back here because he cannot afford to live. If they do so, there will be a cost to our health services and our social services. That needs to be taken into account by the Department for Work and Pensions and the Treasury.

On expats living particularly in France and Spain but throughout the European Union, one potentially very serious issue has been touched on but skated over. If—I hope we do not—the United Kingdom votes to leave the European Union, there is no guarantee that those pensioners will continue to have their pensions uprated. Following the cessation of the winter fuel payment, on the slightly spurious grounds that Guadeloupe, Martinique and one or two other places are part of metropolitan France and that it is therefore appropriate to remove that benefit from those living there, a lot of these pensioners are not, as is popularly described, rich retirees living on yachts in the Mediterranean drinking gin; they are struggling. They will come home, because they will not have anywhere else to go. I suspect that the trickle of people doing so will turn into a torrent if we leave the European Union. It is no good the Brexit people saying we will negotiate unilateral agreements. With 27 countries? Okay, it may be mainly France and Spain, but we would also have to consider Italy, Greece and some of the other 26 member states dotted around the European Union. It is a very real issue that the DWP and the Treasury will have to face.

The all-party group recognises the very real difficulties involved in resolving a problem that has been allowed to build up over many years. With great respect to my hon. Friend the Minister, it is facile to say that successive Governments have done this. Successive Governments have, but successive Governments have been wrong, and it is time we put the injustice right. There has to be a way of addressing the issue.

John Markham, Jim Tilley and others from the International Consortium of British Pensioners have met the Cabinet Office and proposed what I believe to be a sensible solution. I understand entirely that the Treasury is very afraid—this is not a DWP issue, really—that if an inch is given, a mile will be taken in the law courts by people who will seek recompense for the last 40 years. That, of course, could add up to a considerable amount of money. We have to move forward, however. We cannot honourably stay where we are, so John Markham and his colleagues, along with the all-party group, have suggested to the Chancellor of the Duchy of Lancaster that there should be an uprating based on receipt of today’s pensions. If somebody had their pension frozen 20 years ago when they left the United Kingdom, and many have, they would be uprated at that figure, not at today’s figure. That would be a pittance—a pitiful sum of money—but it would be a step in the right direction. Gradually, over time, it would resolve the problem and we would accept the principle that those pensions should be uprated in line with inflation year on year, which is the right principle.

Following receipt of John Markham’s paper, the Chancellor of the Duchy of Lancaster has looked at it and construed that more information is needed. That I accept. The pensioners are not expert in all these matters, although they are pretty good. My understanding is that the Chancellor of the Duchy of Lancaster has been in touch with John Markham and referred the matter back to him. He is now assembling the further information that is required to enable the Office for Budget Responsibility to consider the matter.

The DWP, the Treasury, the Cabinet Office and the Prime Minister all have to recognise this. If we do not address the problem, there will certainly be a moral cost, because we are wrong. There will also be a financial cost, on two fronts, because pensioners who cannot afford to live overseas will come home and pensioners who want to retire overseas will not go. At the end of the day, that will be a cost to the social services budget.

When my hon. Friend comes to respond, if he is granted the leave of the House to do so—I assume that he will be—I would like him simply to say that he recognises the problem, and that he understands that there has to be a way forward. There has to be a solution. I mean no disrespect to him, but I suspect that this is slightly above his pay grade; it is certainly above mine. I want this Conservative Government to have the pride and the courage to give people who are in retirement overseas the dignity that they deserve.

2.54 pm

Marion Fellows (Motherwell and Wishaw) (SNP)

I pay tribute to everyone who has brought this debate to the Chamber. I declare an interest: I am in receipt of a UK state pension, which has been uprated since I first received it. I further declare that it is possible that, at some time in the very distant future, I may decide to live abroad.

As you well know, Madam Deputy Speaker,

“facts are chiels that winna ding

And canna be disputed”.

I have written that down for Hansard. I will repeat many things that have already been said in the debate, because they are important. A pension is not a benefit. It is not a privilege. It is not a handout. Pensions are earned by individuals who contribute to the state—generally those who have worked hard all their lives to provide for themselves and their families and to support our economy.

UK state pensions are uprated according to the laws and regulations in this country, and that right must be extended to all British pensioners abroad, over half a million of whom do not benefit from uprating. Currently, as has been said, no reciprocal agreement exists with the Commonwealth countries of Canada, New Zealand and Australia. UK pensioners living in these countries account for 80% of those who have had their pensions frozen. We have a close relationship with those Commonwealth states, but apparently not close enough to form reciprocal agreements to support pensioners. The countries with which we have reciprocal agreements include the republics of the former Yugoslavia, the USA, Turkey and—a personal favourite of the Government —the tax havens of Barbados and Bermuda. The fact that the Government protect tax havens for the benefit of global elites but fail to right the injustice to their own pensioners perfectly exemplifies the Government’s priorities.

The reasons given by the Government for rejecting universal uprating lack coherence. The Government claim that the price of universal uprating is too high. In fact, Oxford University’s figures estimate that £4,300 is saved each year with every pensioner who moves abroad, because of the decreased pressure on public services. I am sure if they really looked, the Government could find the money to provide for those pensioners, just as they found the money for bombing Syria and just as they will find £167 billion to replace Trident. The Government are more concerned with bombing abroad than they are with supporting our pensioners abroad. The Government have said that they would like to focus on providing for pensioners who are based in the UK, but I reiterate that pensions are a right, and uprating for pensioners abroad should not mean a trade-off with pension rates for people here.

The Government have said that uprating is based on levels of earnings growth and price inflation in the UK, and that it has no relevance to pensioners abroad. However, no reciprocal agreements have been made with the three main foreign countries in which British pensioners live in order to try to overcome that deficit. The Government have said that opposition to universal uprating has been Government policy for 70 years across all Governments. As someone who supports the end of a 300-year political Union, I am not one for blind traditionalism.

This Government, like several before them, have refused even to consider universal uprating; they have refused to negotiate a reciprocal agreement with certain states, including Great Britain’s former dominions; and they have even refused to consider a review. That has all resulted in an asymmetrical system whereby pensioners in the EU and the USA benefit, but those in Australia and Canada, for example, do not.

The Government are taking “an out of sight, out of mind” approach, which leaves our pensioners who live overseas in some countries worse off each year, in real terms, through an incoherent system that sets us apart from every other member of the OECD. Partial uprating is a pragmatic and practical solution, and I urge the Government to take that route. It is about time the Government secured the rights to pension uprating for those who helped to build this country, rather than focusing on decreasing public spending and rolling back the state. When we work, we pay national insurance and taxes, and our pensions are accrued on that basis. Those pensions are a right, and no one should ever be refused what is theirs by right, whether they live here or elsewhere.

2.59 pm

Mr Charles Walker (Broxbourne) (Con)

I am grateful for being called to speak in this debate. I operate on the principle that I have a contract with my Government and my Government have a contract with me: I work hard; I pay national insurance and I pay my tax, and in return I get a pension. That is a very simple expectation. It shames this Government and successive Governments that they have failed to meet their obligation to people who have chosen to move overseas. As I said in an intervention, where someone chooses to live should have no bearing on their pension entitlement, and it is shameful that Governments continue to argue otherwise.

The Minister said—it was a reasonable debating point—that uprating such pensions would cost £500 million a year, but people are owed that money and have a realistic expectation of receiving it. It is not as though a group of angry, silver-haired men and women were demanding some cash without having made any contribution. They deserve this cash precisely because they have made a contribution. Is my hon. Friend the Member for Worthing West (Sir Peter Bottomley) seeking to intervene? He has suddenly lurched forward in his seat.

Sir Peter Bottomley

I was just agreeing with my hon. Friend.

Mr Walker

Oh, that is excellent. It is always nice when someone agrees with me, particularly someone from my own side.

Now that the Minister has resumed his seat, I just want to say that he made great play in his speech of the issue of choice, in that pensioners have a choice about where they live. I am delighted that we have choices in this country—that is the wonderful thing about living in an open and free society—and that we can choose where we live and whom we associate with. However, choice cuts both ways, does it not? Choice also applies to Government. The Government absolutely have the choice to honour their promises to retired people who have made an enormous contribution to this country. Right now, the Government are choosing not to honour those commitments. I conclude this very short speech by saying that the Government should exercise their right to choose by actually choosing to do the right thing.

3.02 pm

Kate Hoey (Vauxhall) (Lab)

I congratulate the hon. Member for Ross, Skye and Lochaber (Ian Blackford) and the other Members who have spoken in this debate. I pay tribute to the hon. Gentleman and his hon. Friends because the fact that so many SNP Members are in the Chamber for this important debate sends out a very positive signal.

Some of us have been speaking about and supporting this campaign for many years. As has been said, parties of all political persuasions have made all the right noises and said positive things when in opposition, but have completely reneged on that when in government, because Governments always tend to renege when the Treasury gets involved. I very much welcome the speech of my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) because she reflected the views of the leader of our party, who has been committed to this for many years. I hope that we will now treat this campaign very seriously and be strong supporters of it.

I pay tribute to John Markham, who for many years has continued to push this issue with the International Consortium of British Pensioners, the global coalition of all the various campaign groups. He has kept going, as have all his supporters, when—time after time, setback after setback—they must have felt that they were not really getting anywhere. Following the speeches by Members on both sides of the Chamber, I hope they feel that they are now beginning to see movement. I also welcome the involvement and support of the National Pensioners Convention. All of us who have pensioners groups in our constituencies—this issue is certainly raised regularly in my area—know that pensioners in this country, no matter how difficult their circumstances, believe that the arrangement is unfair and would welcome the resolution of this problem.

I am particularly concerned about the issue because it involves many people from the Afro-Caribbean community in my area. They came to this country to work many years ago and many of them are now getting on and would like to go back. Some islands in the Caribbean are covered and some are not. It is just ludicrous that our Government cannot work out reciprocal agreements even with that small area of the Caribbean—let us forget the big countries for the moment. Those people want to go back home in their old age to retire, but do not feel they can go back knowing that their pension will not increase and that they may well need help from their families and relatives there, when they have been working over here. They want to go back home and to be able to retire with dignity.

To be honest, the Minister did not really say anything other than what he read out from his brief, which probably included everything he said the last time he spoke. I do not understand why we cannot get a reciprocal agreement with Australia, Canada and New Zealand. When he winds up, will he actually tell us why we cannot get such an agreement? Have the Government tried to do so? When did they last discuss it? What are the obstacles to it? Those three countries are among the countries closest to this country. They are part of the Commonwealth, and many of their citizens died for us during the first and second world wars. Why can we not get a reciprocal agreement with those three countries, and why can we not get one with the whole of the Caribbean?

Reciprocal agreements are only one way of solving this problem. The best way would obviously be to restore fairness by saying that this is the pensioners’ money, not the Government’s—the money is due to pensioners and should have gone to them. At some stage, a Government will have to accept that enough is enough and that we really must take this bold step. I hope that the suggestions made in this very good paper, “Frozen British Pensions: The Case for Change”, which has a lot in it, can be taken up. If we could at least have a partial uprating, that would be a start.

This is a question of justice and fairness, not of cost. We know that the cost for many of the people who would like to move abroad, go back home or retire to be with their family would be made up through savings over the years. There will be savings—there is no doubt about that—and it will also cost us much more if, as has been said, many people came back to this country just when they will need more support from the health service and all the other social services. On the cost issue, I understand that this sounds like a huge amount of money, but to me, £30 million—it would at least start to redress the problem by following the suggestion in this document—is not a huge amount of money. I do not want to get involved in the EU thing, but I think we are giving something like £50 million a day to the European Union. In the scale of things, £30 million is actually a very small amount.

I appeal to the Minister and certainly to my hon. Friend on the Front Bench to keep up the pressure on this issue, particularly because I believe that a start has now been made. During the 27 years that I have been in the House, I have never seen so many Members involved in holding debates or asking questions on these matters. Two or three committed Conservative Members have always done a huge amount of work on it, but for the first time a lot of new Members have understood the issue. The system has not been explained to people. There are even people moving now who do not realise what it means, because the website is not clear; there is no clarity. Many people who moved a long time ago had no idea that their pension would not be uprated, so we have not made this very clear.

I thank all Members who have taken part in the debate today. I hope that those watching this debate all over the world, who have felt so let down over the years, will feel that at last—thanks to the efforts of the Members who have secured this debate and have spoken today—there is a chink of light and that this situation may actually begin to change.

3.09 pm

Sir Peter Bottomley (Worthing West) (Con)

I agree with everything that has been said so far, except what has been said from the Front Bench. That is not to be taken personally by the Minister—we know that his role is to say what the Government have decided not to change.

The issue is that the Government have to change. We ought to start by changing the pension fund for Members of Parliament so that any Member of Parliament who goes to live in one of the countries on the frozen list does not get a pension at all or, if they do, it is not uprated in line with inflation. Why is it that the actuaries who do the calculations for the Government can take their second state pension—their work pension—abroad to any island in the Caribbean, and know that it will be uprated with inflation? Why is it that if they move to the Isle of Skye, the Isle of Wight, the Isle of Ely, or possibly even to Dubai—

Mr Charles Walker

The Isle of Thanet.

Sir Peter Bottomley

Indeed—I am grateful to my hon. Friend. I pay tribute to him, to the hon. Member for Vauxhall (Kate Hoey) and to others who, in advance of the welcome efforts from the Scottish National party, have followed the efforts of John Markham and his predecessors—he was not the first to fight this battle, although I hope he will be the last.

Why is it such an arbitrary collection of countries? I believe that a time will come when this Government find that a Commonwealth Heads of Government meeting is dominated, justifiably, by representatives of the main countries, where the more than half a million pensioners with frozen pensions live, asking the head of our Government why it is that a Minister can sit on the Front Bench and say—these are not precisely the Minister’s words—that we should not worry too much, because if the person really needs money they can get it from social security in the country they live in. That may be true in Australia, but it does not apply to the person who served in the civil service in Southern Rhodesia and stayed on in Zimbabwe, where we can now find billion dollar notes because of the previous inflation—heaven knows what will come from the present situation. That person has no option. That is not fair or right.

The politics mean that this change will come in time. It is a question of when and how. I suspect at some stage in the future—I hope still to be in the House when it happens; I do not intend to go on forever but I intend to go on for quite some time—the full uprating will be applied retrospectively. I understand from John Markham’s team that the first, and possibly only, step will be a partial unfreezing.

We need the Chancellor to understand that, as and when we have the proper plans for the 1.2 million British pensioners overseas to be able to vote—whether in individual constituencies or in some overseas constituency as for France—that will bring in a political power that is missing at the moment. The problem at present is that those who are already overseas tend not to be registered and do not vote—it is a scandal how very few of those who have moved even in the past 15 years are registered to vote and do so—and those who have not yet reached pension age or have not yet gone abroad do not think that this situation really matters to them.

We have 1.2 million British pensioners overseas now, which is 10% of British pensioners. We have to anticipate that there will perhaps be twice as many in the future. The time for the Government to resolve this issue is now. Otherwise, every extra 100,000 British pensioners abroad will mean about 50,000 in a country where their pension will be frozen, and the Government will then start to say that the cost is going up.

The alternative, of course, is for the Government to say that they do not think that pensioners overseas should get an uprating to their state pension and that they will renegotiate the agreements they already have with the EU and other countries around the world so that none of the 1.2 million British overseas pensioners will get an increase. That would at least have some logic to it. Perhaps the Minister will say now—or else he could write to me later—whether the Government have asked any country with which we have a reciprocal agreement whether it would like to drop it. I doubt he will be able to confirm that, because I do not think it has happened. Over the past 35 years, since 1981, the Government have simply thought that they do not have to do much about the situation because people are not making a fuss about it. Well, the job of this House of Commons is to make a fuss about it.

I could go on for quite some time, but I will put it this way. I do not want my Government—this Government or any alternative Government—to go on giving to the Minister in the Department for Work and Pensions the sort of points in their brief that the Minister has been given today and so has given to us. The arguments—not the Minister—are weak and insubstantial. They do not take us any further forward or provide a resolution. They just say, “We’re going to be stick-in-the-muds, because in 1981 we got away with it and nobody noticed.” More than half a million people, in countries that have mostly associated with this country, in war and peace, prosperity and difficulty, are being denied the increases that everyone else takes for granted, not just in this country but around the world.

I pay tribute to the hon. Member for Ross, Skye and Lochaber (Ian Blackford) for bringing the issue forward for debate. I thank the Backbench Business Committee. I hope that the Minister will forgive me for the way in which I put some of my points, which are not personal in any way at all. I hope that he will report back that this House and this country do not believe in unfairness. Some of us think that we were elected to help the Government to start doing things that are right because they are right, and not just because popular pressure will grow to make them do those things, whether they think they are right or wrong. The reason to do this is that it is right. The time to do it is now. I hope that that message will go clearly through to the Government.

3.16 pm

Mhairi Black (Paisley and Renfrewshire South) (SNP)

I thank my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) for securing this debate.

It is fair to say that, given my youthfulness, prior to last year I did not have a great understanding of pensions. But the more I look into the different issues, the more bizarre the world of pensions seems to get. I thank the hon. Member for North Thanet (Sir Roger Gale) for mentioning the fact that we are not at the WASPI meeting because we are in this Chamber debating this issue. He made an interesting point, which is in fact one reason why I find this debate incredibly bizarre. He said that the Government claim to have received legal advice that raises fears that people will be able to claim for back payments. But legal advice received by the International Consortium of British Pensioners from Blackstone Chambers contradicts that.

The Minister said that many pensioners overseas whose pensions are frozen are compensated through means-tested benefits in their country of residence and implied that unfreezing those pensions would make savings for foreign Governments at the expense of the UK taxpayer. But again, when we look at the facts, the ICBP’s recent review of the countries with the largest numbers of British pensioners with frozen pensions shows that that is simply not the case. The vast majority of pensioners would benefit greatly from an uprating in full.

That brings me to the person who my hon. Friend the Member for Ross, Skye and Lochaber mentioned, Anne Puckridge, the former college lecturer, who is now 91 years of age. She worked in the UK all her life, then moved to Canada to be with her daughter and grandchildren. Fourteen years on, Anne, who served as an intelligence officer in the Women’s Royal Naval Service during the second world war, is struggling to live on a frozen pension of £75.50, which is what she was entitled to when she moved. As my hon. Friend pointed out, she now fears that she will be forced to move back to Britain to be able to survive. He gave us some telling quotes. She has said:

“It’s the small things, and the injustice, that is really getting to me…I value my independence, but I can’t go on living on the breadline and I don’t want to inflict this on my family.”

That is telling. She is not asking for millions here—she does not want to raid the bank. She is asking for the extra 20 or 30 quid that she is entitled to after she paid into the system all her working life. Anne went on to say—this is perhaps the part that gives us most insight—

“As well as ever-increasingly poverty, I feel a sense of stress and shame, which is affecting my health.”

I looked through the various briefings on this issue and the previous debates there have been, for years now—as the Minister rightly pointed out, this debate has been going on since probably after world war two. In 1981, the line from the Government was not far off what the Minister said today. They said that they could not, unfortunately, unfreeze the pensions because that was incompatible with the Government’s policy of containing the long-term cost of the social security system to ensure that it remained affordable. This is an incredibly cynical point—I am getting used to those in here, so I thought I may as well join in—but it concerns the real lunacy of the argument about cost. Instead of giving people who have paid into the system all their life the £20 or £30 extra that people in the UK get and to which they are entitled, we are saying, “We’re not going to give you that money, but you can go and live abroad, make yourself ill through poverty, worry and the stress of having to come home. When you are forced to return to Britain, don’t worry, we’ll foot the bill for the NHS and everything else.” The argument about cost does not stand up—costs will increase when pensioners who have been made ill through stress or whatever, have to come back in order to survive.

Alan Brown

Yet again, my hon. Friend is making a powerful argument. Does not another nonsense argument about cost concern the reciprocal arrangement that is needed, given that Canadians in this country can get the full state pension from their country but British pensioners cannot get it in Canada? This is not about protecting social security in this country, because a reciprocal arrangement could easily be put in place. We are supposed to have the best social security system in the world, so the argument about cost is nonsense given that the Canadians can afford to pay for their citizens in this country.

Mhairi Black

I could not agree more with my hon. Friend, and I will touch on our relationship with Canada in a minute. My argument is supported by a 2010 study by Oxford Economics, which used Government statistics to show that a pensioner who permanently leaves the UK saves it £4,300 a year in NHS usage and other social security benefits. We are placing an increasing workload and cost on to the NHS and other public bodies—the very bodies that we are simultaneously using as part of the argument to continue with frozen pensions. It makes no sense.

The third reason often given by the Government for this measure is that there could be some sort of legal or political backlash, but that is not the case. This issue has been debated for years, and Annette Carson made a legal challenge against the Government on the basis of discrimination. She said that because she was in South Africa, which does not have a reciprocal deal with the UK, her pension was frozen, whereas if she had moved to an EU country—or a country with such a deal—she would have had an uprated pension. The judge ruled that she lost the case and that there was no discrimination, but he noted just how ludicrous the system is, and how much confusion there is about it. He ruled that it was a political, rather than judicial, decision, which shows how crazy these plans are—the hon. Member for Worthing West (Sir Peter Bottomley) used that word previously.

Any pensioner who moves within the EU or the European economic area gets an increase, and the UK has reciprocal agreements with 16 countries. As the hon. Member for Vauxhall (Kate Hoey) pointed out, our agreements with Canada, New Zealand and Australia do not allow for uprating, yet those three countries are home to 80% of overseas residents who do not receive upratings.

I agree with everything that the hon. Member for Broxbourne (Mr Walker) said about choice and how that has to work both ways with the Government. The Minister said that pensioners can choose whether to go to country A that has a deal, or country B that does not, but that does not add up. Surely true freedom would allow someone to choose freely where they want to go, knowing that they have paid in all their life and will now get that back. It is not for the Government to put a hindrance on where people can choose to spend the pension that they have built up over their lifetime.

Sir Peter Bottomley

The hon. Lady has not put forward this idea directly, so perhaps I should say it out loud. Perhaps if New Zealand, Australia, South Africa, Canada and others applied to join the EU, people would get that uprating and we would solve the problem.

Mhairi Black

That is an interesting point, but we will wait and see how things go in the summer.

Everything that has been mentioned in this debate touches on a deeper, more fundamental problem within pensions as a whole under this and previous Governments—that of inconsistency. We tell people to pay national insurance for a pension and to save for a fulfilling, free and happy retirement—but only in certain places. We tell people that we will give them greater freedom, that they can be trusted with their pensions, and that we will give them greater choice and allow them to take their pensions early—but we will not give them the freedom to move anywhere with that pension. Deals are made to uprate pensions in some countries, but not others; people are given the vote in some countries, but the Government are not prepared to pay out for their pension. It does not make sense. Everything seems to be convoluted and conflicting.

My hon. Friend the Member for Ross, Skye and Lochaber mentioned what the Chancellor said about being supportive of change when he was in opposition, but the House of Commons Library shows that the then shadow pensions Minister explained that the Conservatives had “considerable sympathy” with those affected. The Prime Minister stated in a letter that the Government do not feel that they can change anything in times of austerity—“How can we unfreeze those pensions when people in the UK are being asked to make sacrifices?” However, in the wake of recent events—whether the saga of the Panama papers or the shambolic deal with Google—it is clear that the Government are asking the wrong people to make sacrifices, and it is worth reminding the Minister that all the sympathy in the world will not pay the bills.
Madam Deputy Speaker (Mrs Eleanor Laing)

Several Members have asked the Minister to speak again, so with leave of the House I call Mr Vara.

3.26 pm

Mr Vara

With leave of the House I would like to make some brief comments. I am mindful that this is a Backbench Business Committee debate, and that it is not normal for Front Benchers to have a second go. I do not want to set a precedent, so I will just make one or two concluding comments about issues that have been raised.

Bilateral agreements were mentioned, and those are normally negotiated on the basis of compatibility of systems. That reciprocity is achieved between the two nations, and respective costs are broadly balanced. Canada has more than 150,000 recipients of the UK state pension, but any new bilateral agreement would not achieve reciprocity and would be disadvantageous to the UK taxpayer.

I pay tribute to my hon. Friend the Member for North Thanet (Sir Roger Gale) for all the work that he has done consistently over a number of years on this issue.

Sir Peter Bottomley


Mr Vara

I will not take any interventions, but I pay tribute to my hon. Friends the Members for Worthing West (Sir Peter Bottomley) and for Broxbourne (Mr Walker), and to the hon. Member for Vauxhall (Kate Hoey).

Sir Peter Bottomley


Mr Vara

I will not give way.

Sir Peter Bottomley

On a point of order, Madam Deputy Speaker. The logic, I think, is that if a reciprocal agreement may be done at no cost, there would be no reciprocal agreements anywhere.

Madam Deputy Speaker

The hon. Gentleman knows that I cannot answer that because it is not a point of order. It is a point of debate, and the Minister is being brief because he has the leave of the House to speak again.

Mr Vara

Thank you, Madam Deputy Speaker—I do not wish to abuse the leave of the House.

I simply conclude by referring to the issue raised by the International Consortium of British Pensioners, which my hon. Friend the Member for North Thanet mentioned. He was right to say that it has come up with proposals, but it was felt that they were not sufficiently developed. The ICBP is working on more proposals and we look forward to having sight of them.

I once again congratulate the hon. Member for Ross, Skye and Lochaber on securing the debate.

3.28 pm

Ian Blackford

We have had a great debate and there is unity on both sides of the Chamber that the situation shames us all. Members on both sides of the House want the Government to take action. As many have said, it is about fairness. I thank the Front Benchers who have spoken, my hon. Friends the Members for Motherwell and Wishaw (Marion Fellows) and for Paisley and Renfrewshire South (Mhairi Black), and the hon. Members for North Thanet (Sir Roger Gale), for Broxbourne (Mr Walker) and for Worthing West (Sir Peter Bottomley).

This is a matter of considerable importance. The hon. Member for North Thanet has led the all-party parliamentary group with support from many others, including the hon. Member for Worthing West. We will not let this go, because we have a duty to stand up for the John Markhams of this world and all the others who have been mentioned.

I purposely did not mention the partial uprating but other hon. Members did. The Government could make a start by acknowledging the partial uprating. I say this to the Minister: please go away and talk to the Chancellor of the Exchequer, who spoke in 2003 about the injustices taking place at that time. The Government should accept the moral responsibility that we have for pensioners everywhere. To take the logic of the hon. Member for Worthing West, if we as Members of Parliament decided to go and live in the British Virgin Islands, we would get our pension. If it is right for us, it is right for everybody else. Let’s do the right thing.

Question put and agreed to.


That this House notes with concern that the pensions of 550,000 UK pensioners residing in a number of overseas countries will no longer be uprated; is further concerned that this unfairness will lead to hardship for overseas pensioners and that this measure will discourage many UK citizens living in the UK from returning to their country of origin as many wish to do in their retirement; regrets that the Government has taken this action which will lead to loneliness and anger among UK pensioners living abroad; and calls on the Government to withdraw this measure and pay UK pensioners at home and abroad their due state pension with the same uprating adjustment in the interests of fairness and equity.


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  1. Brian Corrigan
    May 12, 2016 - 3:54 pm

    Just watched the debate. Excellent arguments from the Labour, SNP, and conservative benches. The first time I have seen them all united. Regrettably the Minster representing the government front bench was reduced to presenting an argument we have all heard before and which seemed to have been copied from the DWP’s library. It was a good debate with a poor performance from the Governments front bench and personally gives me hope that we will achieve the pensions we have paid for,if not immediately,very soon. The APPG Chairman and treasurer should be congratulated,especially Ian Blackford and his team.Well done!

  2. Brian Corrigan
    May 12, 2016 - 3:58 pm

    Shailesh Vara is Parliamentary Under-Secretary of State DWP. The position is the lowest of three tiers of a government minister in the government of the United Kingdom, junior to both a Minister of State and a Secretary of State. Having been an undersecretary in Macmillan’s 1957–1963 Conservative government, the Duke of Devonshire noted: “No one who hasn’t been a Parliamentary Under-Secretary of State has any conception of how unimportant a Parliamentary Under Secretary of State is”.[1] Mr Vara is the man at the centre of the government’s argument at yesterday’s debate on frozen pensions. For the government to be taken seriously and have any credibility it should consider a person with a higher pay grade to represent it when holding debates. This man was totally outgunned and must seriously look himself in the mirror and ask why he was hung out to dry by his seniors.

  3. John West
    May 13, 2016 - 12:59 am

    Yes heard this tremendous debate live and just recapped a few things, as was trying to listen lol with distant Family in the house and thought I was in Parliament at Quiestion Time!!!
    The bottom line is the frozen pensioner is entitled to the same State Pension, as anyone else and often paid in more than others. It is not a BENEFIT!!! It is a RIGHT!!!
    Yes also ofcourse it should not matter where someone lives and in any case the point is they want to be with their Families. and often people meet their spouse, for example on holiday and want just to be with them and their loved ones and we talking of so little money here and trying to provide for them, as best we can.
    In addition this Government spokesman stating, (what an embarrasment!!!) well it is a matter of choice and frankly very insulting and when I was paying ALL of my taxes and NI contributions, there was no widespread or no knowledge of this barbaric and totally discriminatory “policy” when these amount merrily being taken out of our paypackets every month.
    Yet this been going on for 70 years and to be frank, I only and several others were not really aware of it, until it got more widespread coverage the last couple of years.
    That is not intending to have a go at anyone ie the organisations which have been fighting this for years have worked so hard.
    So no one really knows what happens next and apparently the Government are awaiting an update on figures fron APPG and ICBP and they both based in London the same place as the Govt, so what is the hold up!!!

    Again what then happens is a complete mystery, but one thing is for sure only the Government can and probably will not change the rules and put on the Statute Book. Maybe I might be surprised.
    Hang your heads in shame and yes definately successive Governments for generation, upon generation.
    Thank you so very much The Right Hon Ian Blackford in particular and there are others and at least more and more people and not just politician are being made well aware of these facts, so maybe the message getting through. Over to you Government. DO THE RIGHT THING AND IT IS SIMPLE.. JUST DO IT.!!!!!

  4. John Schofield
    May 13, 2016 - 1:55 am

    As a soon to be a UK State Pensioner, (I reach 65 years of age in Aug
    2016) who served 23+ years in the British Army now living in Australia
    with my wife, who has been in receipt of a FROZEN UK State Pension since

    We emigrated to be near to our family and grandchildren who
    emigrated from the UK in 2007. The situation of FROZEN pensions is
    SHAMEFUL on this and any other former UK Government and for the Under
    Secretary to say it is a matter of choice is frankly bewildering and obscene.

    people or parties enter into a contract it is supposedly an agreement between all
    sides and not something that should be arbitrarily changed by any
    previous governments and to be continually upheld by this government is a
    SHAMEFUL position.

    Yes, I have a Military Service Pension, which is
    up-rated annually in line with the CPI in Sept of each year, but not
    this year as I am led to believe that the CPI last Sept was -0.5%.

    important item to also note is that as immigrants in Australia we have
    no recourse to the Australian Welfare System until we have lived here
    for 10 years.

    So why is the State Pension that my wife earned through
    FULL NI CONTRIBUTIONS during her working life FROZEN?

    Any pensioner
    does not have to have their pensions paid via any other government
    department of the country that they now live in. They simply elect to have
    it paid into a UK Bank account and transfer the money themselves to
    their bank account in the country they now live in. So for the Under
    Secretary to claim that reciprocal agreements if entered into would not
    guarantee that the pensioners would get their pension is simply a GROSS FALSEHOOD and UNTRUE!!

    Apologies for “shouting” but highly annoyed about this situation!

    • Brian Corrigan
      May 13, 2016 - 2:52 am

      John you are correct. Contracts are a two way street. There is however another point that is sometimes forgotten by politicians and that is the fact that we all don’t have a choice when it comes to making contributions to our state pension……it is mandatory. Yes we do have a choice when it comes to where we live in retirement as the minister states. It would however be more democratic to be able to excercise the same choice when it comes to paying for our state pensions. I don’t know of any private pension scheme that denies me my right to decide where I live in retirement and also denies me my pension uprating.

      • John Schofield
        May 13, 2016 - 2:59 am

        Couldn’t agree with you more Brian!!

    • John West
      May 13, 2016 - 3:46 am

      John You are not shouting, but agree with you and often I do myself accidentally on purpose.
      What it is is that well they should all be ashamed, YES ALL GOVERNMENTS GOING BACK DECADES, oOoops I AM SHOUTING.
      It is also Status Quo in that if they admit all of them have made this barbaric and discriminatory “policy” but too ashamed to admit it. But more than likely they have no shame and the present Govt have no intention of ending this, but Labour and Lis just as much to blame and no one has the manners to reply to our tweets.
      Le’s give more money away in Foreign aid, the refugees flooding in and yes indeed the UK’s own scum too and bothing for the frozen pensioner. What do they look like? Out of sight and out of mind.
      Well been out of my mind for years!!!!

      • John Schofield
        May 13, 2016 - 3:59 am

        Let’s hope something comes of this but I’m not holding my breath¬¬

  5. Brian Corrigan
    May 13, 2016 - 4:51 am

    The British Prime Minister Mr Cameron yesterday to great fanfare
    introduced his Governments proposals for combatting corruption. Though corruption is often viewed as illegal, there is an evolving concept of legal corruption,as developed by Daniel Kaufmann and Pedro Vicente. It might be termed as processes which are corrupt, but are protected by a legal (that is, specifically permitted, or at least not proscribed by law) framework. I would suggest that the withholding of money from pensioners and using a law to do this is by definition Legally Corrupt. Perhaps Mr Cameron would like to get his own house in order before making broad brush statements?

  6. icepensioner
    May 14, 2016 - 6:04 am

    Having read the transcript of the debate I am at a loss to understand why so much emphasis was put on Reciprocal Agreements. Can anyone explain why this was so? According to the House of
    Commons Library notes the 1966 DSS Memorandum to the Social Security Committee explained that RAs were not really necessary to uprate pensions it can be done surely by domestic legislation.
    RAs are
    (a) To provide a measure of social protection, for WORKERS and the immediate members of their families, when moving from one country to another during their WORKING lives. In effect they generally prevent WORKERS from having to contribute to both countries social security schemes at
    the same time whilst ensuring they retain benefit cover from either one country or the other during their working lives.
    b) On reaching pensionable age, such workers who have been insured in two or more countries’ schemes can receive a pension from each which reflects the amount of their insurance in each country).
    Have the government moved the goal posts without informing the public? Has a new law been introduced? As the then Pension Mr Webb stated in 2011, also the Freedom of Information in 2013
    stated that uprating of pensions is a domestic matter. The Pension Act. There is no reason to make agreements with other countries.
    Mr Vara referred to the agreements and failed to show the 2 different aspects of those agreements referred to in a) and b) above. (He did vaguely mention a) but shied away from b)
    naturally. Clearly the “normal negotiations” are aimed at the WORKERS. There is no argument about that. The normal pension payment scheme is as for each country. He suggests any new agreement would be disadvantageous to the UK taxpayer. This is not really appropriate when we
    are talking of NIS contributors. All workers pay the same NI contributions to the NIS fund. Yes a small amount of that goes to a few other causes such as unemployment payments and a small amount to the NHS. The main cost is for pensions. That’s what it was designed to do.
    As for the cost of uprating how can the government say we can’t afford £500 million from the £29 billion balance according to the audit commission? The Minister quoted £500 million to uprate all pensions. (its gone down a bit from £590 million!) That is roughly 0.7% of the total pension cost. A large amount of money they say. May I compare that with a similar 0.7%? The £11.4 billion ring-fenced for Overseas Aid that is from the UK total expenditure.
    Would it not be reasonable to accept that such similar %ages should mean that if one can be afforded then so can the other?
    a) The Overseas Aid cost comes from the general treasury fund that we all pay income tax to. (for all other non-specified costs).
    b) The state pension comes from the NIS, (national INSURANCE scheme), fund that is primarily for the collection of mandatory contributions, the payment of the State Pension, and some associated payments, AND FOR EXCEPTIONAL SITUATIONS. The fund was set up as insurance that workers would get a liveable pension on retirement. The fund is a secure fun and not for other expenditures.
    According to the Audit commission the balance of the NIS fund for 2016 is £29 billion. How can the treasury and the DWP say there is no money available when the secured fund has a balance of
    nearly £29 billion?
    Robbing Peter to pay Paul is not an acceptable reason for non-uprating. It is understandable to loan some of the fund that will provide some income on interest. However the fund must be
    available for its determined usage. As money is required to cover the mere, (now) £500million to cover the cost of the exceptional situation of uprating, the loan, (or part thereof), should be repaid and a new loan from the general fund should be obtained.
    There are 12 million current pensioners. All paid the same mandatory contributions. 1.2 million live
    overseas. Half get uprated the other half do not. The Equality Act says all 12 million should be treated the same.
    The Equality Act 2010.
    (1)In relation to the protected characteristic of age—
    (a)a reference to a person who has a particular protected characteristic is a reference to a person of a particular age group;
    (b)a reference to persons who share a protected characteristic is a reference to persons of the same age group.
    (2)A reference to an age group is a reference to a group of persons defined by reference to age, whether by reference to a particular age or to a range of ages.
    In this case the age group would be “persons of the age for receiving the State Pension”.
    All pensioners would of course share that protected characteristic and should all be treated equally under the Act.
    The DWP may claim that the regulation made under section 20 of the Pension Act 2014 makes it legal to withhold uprating. I would claim that the making of a regulation should not
    override the Equality Act 2010.
    Perhaps the government will compare the response in answer to the petition you signed –
    “Stop spending a fixed 0.7 per cent slice of our national wealth on Foreign Aid,”
    with frozen pensioners.
    the response
    “The UK’s aid commitment means we can be proud to be a country that not only meets its responsibilities to the world’s poorest, but in doing so best serves and protects its own security and interests”.
    How about the government being proud to be a country that not only meets its responsibility to its own vulnerable pensioners. How about protecting your own pensioners and
    protect their interests?
    Mr Cameron and the Pension Minister are using the expats in Europe by suggesting that if the UK exit the EU, UK pensioners could possibly become frozen pensioners! They have not worked
    out how pensions would be affected and refer to no RAs or agreements that would
    cease to exist and how can they deal with it.
    Simple answer is that the expats pension is paid under the PensionAct 2014. We all know that RAs are not required to maintain payment of full pension, all that needs doing is amending the regulation to include EU countries in the list of specified countries where they are not considered as
    overseas residents.
    Of course this scaremongering is an attempt to get expats to vote to stay in the EU. They suggest stay in and maintain your full pension, or leave and become frozen.
    Surely it is time this 70 year old policy is thrown out. We are living in the modern
    world. Far far different from 70 years ago.
    Hundreds of thousands of migrant workers in the UK will be affected by this frozen
    pension policy. How many will stay because of the policy? A UK pensioner costs double the cost of
    an overseas living pensioner. So they should be encouraged to return home by
    revoking this frozen policy.
    Afterall the years the DWP knew RAs are not a legal requirement and knowing what the NI Fund was set up for as secured fund, they still use the ancient excuses to rob pensioners of their entitled pension.
    (If you want to hear the original excuses you will not find it on a CD or Vinyl record but on the old cylinder! )

    Overall my impression is that we have all been conned again. How is it all frozen pension groups are fully aware RAs are red hearing and not a legal requirement?
    We all know the NIS fund should be available to uprate pensions with hardly a dent in its balance. just two government excuses to fight. well mauled by campaigners but still on top. So what is going on here?
    Why do campaigning groups still talk of RAs? Why do they say they understand its costly?
    Sorry you 95 year olds that have ben waiting 30 years for uprating, as I see it you
    will have to wait another 30 years.

  7. Morgeo
    May 14, 2016 - 2:32 pm

    if you go here you can read the annotations made along with the debate. You may need to scroll up to the start and by selecting “Individually” on the right hand side you will have the facility to make your own annotation, see it here : Come and join those already there.

  8. shadsfan
    July 9, 2016 - 6:07 pm

    I have finally got round to reading this in its entirety. All I can say is that talk is cheap and, as usual, nothing is accomplished by these feather bedded British politicians who continue to refuse to do the right thing for their fellow citizens by rectifying the travesty, despite the issue staring them squarely in the face. They are too blind and too cowardly to change the status quo. It’s all bollocks and I’ve had it with them! Let’s hope, as is suggested, that with the UK departing the festering EU cabal, every other expat, no matter where they reside, will have their pensions frozen. Were that to happen there will be one hell of a national uproar and perhaps bring greater momentum to this fight. Maybe then something will be done but I have my doubts and I’m not holding my breath based on their lies of ‘reciprocal agreements’ and their 70+ years of prevarication.

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